0.00010.001false--12-31Q120200000895126713000000748000000200000020000000.010.011500000022500000977279397837730.080.080.080.1150.05750.053750.048750.0750.070.068751.41432.42410.20560.26500100000010000000.010.01200000002000000055634585563458755000000755000000P3YP3YP3Y0.0050.005262240126971790155344126 0000895126 2020-01-01 2020-03-31 0000895126 2020-05-07 0000895126 chk:SixPointEightSevenFivePercentSeniorNotesDueTwoThousandTwentyMember 2020-01-01 2020-03-31 0000895126 chk:SixPointOneTwoFivePercentSeniorNotesDueTwoThousandTwentyOneMember 2020-01-01 2020-03-31 0000895126 chk:FourPointFiveZeroPercentageCumulativeComvertiblePreferredStockMember 2020-01-01 2020-03-31 0000895126 chk:FourPointEightSevenFivePercentSeniorNotesDueTwoThousandTwentyTwoMember 2020-01-01 2020-03-31 0000895126 chk:FivePointSevenFivePercentSeniorNotesdueTwentyTwentyThreeMember 2020-01-01 2020-03-31 0000895126 chk:FivePointThreeSevenFivePercentSeniorNotesdueTwentyTwentyOneMember 2020-01-01 2020-03-31 0000895126 chk:SixPointSixTwoFivePercentSeniorNotesDueTwoThousandTwentyMember 2020-01-01 2020-03-31 0000895126 us-gaap:CommonClassAMember 2020-01-01 2020-03-31 0000895126 2020-03-31 0000895126 2019-12-31 0000895126 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember 2020-03-31 0000895126 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember 2019-12-31 0000895126 us-gaap:CommonStockMember us-gaap:SubsequentEventMember 2020-04-14 2020-04-14 0000895126 2019-01-01 2019-03-31 0000895126 us-gaap:OilAndGasMember 2019-01-01 2019-03-31 0000895126 us-gaap:OilAndGasMember 2020-01-01 2020-03-31 0000895126 chk:OilandGasGatheringProcessingandTransportationMember 2020-01-01 2020-03-31 0000895126 us-gaap:ManufacturedProductOtherMember 2020-01-01 2020-03-31 0000895126 us-gaap:OilAndGasExplorationAndProductionMember 2020-01-01 2020-03-31 0000895126 chk:OilandGasandMarketingMember 2019-01-01 2019-03-31 0000895126 us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember 2020-01-01 2020-03-31 0000895126 chk:OilandGasProductionMember 2019-01-01 2019-03-31 0000895126 chk:OilandGasGatheringProcessingandTransportationMember 2019-01-01 2019-03-31 0000895126 us-gaap:OilAndGasExplorationAndProductionMember 2019-01-01 2019-03-31 0000895126 chk:OilandGasProductionMember 2020-01-01 2020-03-31 0000895126 chk:OilandGasandMarketingMember 2020-01-01 2020-03-31 0000895126 us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember 2019-01-01 2019-03-31 0000895126 us-gaap:ManufacturedProductOtherMember 2019-01-01 2019-03-31 0000895126 chk:ChangeInAccruedDrillingAndCompletionCostsMember 2020-01-01 2020-03-31 0000895126 2019-03-31 0000895126 chk:ChangeInAccruedDrillingAndCompletionCostsMember 2019-01-01 2019-03-31 0000895126 2018-12-31 0000895126 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000895126 us-gaap:PreferredStockMember 2019-12-31 0000895126 us-gaap:CommonStockMember 2020-03-31 0000895126 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0000895126 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0000895126 us-gaap:NoncontrollingInterestMember 2018-12-31 0000895126 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0000895126 us-gaap:RetainedEarningsMember 2020-03-31 0000895126 us-gaap:ParentMember 2019-03-31 0000895126 us-gaap:PreferredStockMember 2018-12-31 0000895126 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000895126 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0000895126 us-gaap:CommonStockMember 2019-12-31 0000895126 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0000895126 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0000895126 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000895126 us-gaap:TreasuryStockMember 2019-01-01 2019-03-31 0000895126 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0000895126 us-gaap:RetainedEarningsMember 2019-12-31 0000895126 us-gaap:RetainedEarningsMember 2019-03-31 0000895126 us-gaap:RetainedEarningsMember 2018-12-31 0000895126 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000895126 us-gaap:TreasuryStockMember 2020-03-31 0000895126 us-gaap:NoncontrollingInterestMember 2019-03-31 0000895126 us-gaap:TreasuryStockMember 2020-01-01 2020-03-31 0000895126 us-gaap:CommonStockMember 2019-03-31 0000895126 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0000895126 us-gaap:NoncontrollingInterestMember 2020-03-31 0000895126 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000895126 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0000895126 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000895126 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0000895126 us-gaap:TreasuryStockMember 2018-12-31 0000895126 us-gaap:TreasuryStockMember 2019-12-31 0000895126 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0000895126 us-gaap:ParentMember 2020-03-31 0000895126 us-gaap:CommonStockMember 2018-12-31 0000895126 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0000895126 us-gaap:NoncontrollingInterestMember 2019-12-31 0000895126 us-gaap:TreasuryStockMember 2019-03-31 0000895126 us-gaap:PreferredStockMember 2019-01-01 2019-03-31 0000895126 us-gaap:PreferredStockMember 2020-01-01 2020-03-31 0000895126 us-gaap:RestrictedStockMember 2019-01-01 2019-03-31 0000895126 us-gaap:ConvertibleDebtSecuritiesMember 2020-01-01 2020-03-31 0000895126 us-gaap:ConvertibleDebtSecuritiesMember 2019-01-01 2019-03-31 0000895126 us-gaap:RestrictedStockMember 2020-01-01 2020-03-31 0000895126 chk:FivePointZeroZeroPercentageCumulativeConvertiblePreferredStockSeriesTwoThousandAndFiveBMember 2020-03-31 0000895126 chk:FivePointSevenFivePercentCumulativeConvertibleNonVotingPreferredStockSeriesAMember 2020-03-31 0000895126 chk:FourPointFiveZeroPercentageCumulativeComvertiblePreferredStockMember 2020-03-31 0000895126 chk:FivePointFivePercentConvertibleNotesDue2026Member us-gaap:ConvertibleDebtMember 2020-03-31 0000895126 chk:FivePointSevenFivePercentCumulativeNonVotingConvertiblePreferredStockMember 2020-03-31 0000895126 us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-12-31 0000895126 us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember 2020-03-31 0000895126 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-03-31 0000895126 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0000895126 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0000895126 us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-12-31 0000895126 us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember 2020-03-31 0000895126 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-03-31 0000895126 chk:SixPointEightSevenFivePercentSeniorNotesDueTwoThousandTwentyFiveMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 chk:EightPointZeroZeroPercentSeniorNotesDueTwoThousandTwentyFiveMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:EightPointZeroZeroPercentSeniorNotesDueTwoThousandTwentySixMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 chk:FivePointSevenFivePercentSeniorNotesdueTwentyTwentyThreeMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 chk:FivePointThreeSevenFivePercentSeniorNotesdueTwentyTwentyOneMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:SixPointEightSevenFivePercentSeniorNotesDueTwoThousandTwentyMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 chk:SevenPointFivePercentSeniorNotesDueTwoThousandsTwentySixMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:SevenPointZeroPercentSeniorNotesDueTwoThousandTwentyFourMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:FivePointFivePercentConvertibleNotesDue2026Member us-gaap:ConvertibleDebtMember 2019-12-31 0000895126 us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-03-31 0000895126 us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-12-31 0000895126 chk:FivePointSevenFivePercentSeniorNotesdueTwentyTwentyThreeMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:SixPointOneTwoFivePercentSeniorNotesDueTwoThousandTwentyOneMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:SixPointEightSevenFivePercentSeniorNotesDueTwoThousandTwentyMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:SevenPointFivePercentSeniorNotesDueTwoThousandsTwentySixMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 chk:ElevenPointFivePercentSeniorSecuredSecondLienNotesDueTwoThousandTwentyFiveMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:FourPointEightSevenFivePercentSeniorNotesDueTwoThousandTwentyTwoMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 us-gaap:LoansPayableMember 2020-03-31 0000895126 chk:FivePointThreeSevenFivePercentSeniorNotesdueTwentyTwentyOneMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 chk:ElevenPointFivePercentSeniorSecuredSecondLienNotesDueTwoThousandTwentyFiveMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 us-gaap:LoansPayableMember 2019-12-31 0000895126 chk:EightPointZeroZeroPercentSeniorNotesdueTwoThousandTwentySevenMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 chk:SixPointSixTwoFivePercentSeniorNotesDueTwoThousandTwentyMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:SixPointSixTwoFivePercentSeniorNotesDueTwoThousandTwentyMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 chk:SixPointOneTwoFivePercentSeniorNotesDueTwoThousandTwentyOneMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 chk:SixPointEightSevenFivePercentSeniorNotesDueTwoThousandTwentyFiveMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:EightPointZeroZeroPercentSeniorNotesdueTwoThousandTwentySevenMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:EightPointZeroZeroPercentSeniorNotesDueTwoThousandTwentyFiveMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 chk:FourPointEightSevenFivePercentSeniorNotesDueTwoThousandTwentyTwoMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 chk:EightPointZeroZeroPercentSeniorNotesDueTwoThousandTwentySixMember us-gaap:SeniorNotesMember 2019-12-31 0000895126 chk:SevenPointZeroPercentSeniorNotesDueTwoThousandTwentyFourMember us-gaap:SeniorNotesMember 2020-03-31 0000895126 us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember 2019-12-03 0000895126 us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember 2020-03-31 0000895126 us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember 2019-12-02 0000895126 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember chk:AlternativeBaseRateABRMember 2019-02-01 2019-02-01 0000895126 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-02-01 2019-02-01 0000895126 us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember 2019-12-03 2019-12-03 0000895126 us-gaap:SeniorNotesMember 2020-03-31 0000895126 srt:ScenarioForecastMember us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember 2022-03-31 0000895126 us-gaap:SeniorNotesMember 2020-01-01 2020-03-31 0000895126 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember chk:AlternativeBaseRateABRMember 2019-02-01 2019-02-01 0000895126 srt:ScenarioForecastMember us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember 2021-12-31 0000895126 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-02-01 2019-02-01 0000895126 srt:ScenarioForecastMember us-gaap:RevolvingCreditFacilityMember chk:ChesapeakeRevolvingCreditFacilityMember 2022-06-30 0000895126 chk:SevenPointFivePercentSeniorNotesDueTwoThousandsTwentySixMember us-gaap:ConvertibleDebtMember 2020-03-31 0000895126 chk:EightPointZeroZeroPercentSeniorNotesDueTwoThousandTwentySixMember us-gaap:ConvertibleDebtMember 2020-03-31 0000895126 chk:FTSInternationalInc.CaseMember chk:FtsInternationalIncMember us-gaap:PendingLitigationMember 2019-02-01 2019-02-28 0000895126 chk:HealthcareofOntarioPensionPlanHOOPPMember chk:ChaparralEnergyInc.Member us-gaap:PendingLitigationMember 2014-01-05 2014-01-05 0000895126 chk:CommonwealthofPennsylvaniaRoyaltyUnderpaymentMember us-gaap:SettledLitigationMember 2017-12-20 2018-08-09 0000895126 chk:GatheringProcessingandTransportationAgreementMember 2020-03-31 0000895126 chk:JointInterestMember 2019-12-31 0000895126 chk:OilNaturalGasandNGLSalesMember 2020-03-31 0000895126 chk:OilNaturalGasandNGLSalesMember 2019-12-31 0000895126 chk:OtherRevenueMember 2019-12-31 0000895126 chk:JointInterestMember 2020-03-31 0000895126 chk:OtherRevenueMember 2020-03-31 0000895126 us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember srt:NaturalGasLiquidsReservesMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasReservesMember chk:HaynesvilleMember 2020-01-01 2020-03-31 0000895126 us-gaap:OilAndGasMember srt:NaturalGasLiquidsReservesMember 2019-01-01 2019-03-31 0000895126 chk:OtherMarketingRevenueMember srt:NaturalGasReservesMember 2020-01-01 2020-03-31 0000895126 chk:HaynesvilleMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasReservesMember 2019-01-01 2019-03-31 0000895126 chk:EagleFordMember 2019-01-01 2019-03-31 0000895126 srt:OilReservesMember chk:EagleFordMember 2020-01-01 2020-03-31 0000895126 chk:OtherMarketingRevenueMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:MarcellusMember 2020-01-01 2020-03-31 0000895126 chk:MidContinentMember 2020-01-01 2020-03-31 0000895126 chk:HaynesvilleMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasReservesMember chk:MarcellusMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:BrazosValleyMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:MidContinentMember 2020-01-01 2020-03-31 0000895126 chk:MarcellusMember 2020-01-01 2020-03-31 0000895126 us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember srt:NaturalGasReservesMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:HaynesvilleMember 2019-01-01 2019-03-31 0000895126 chk:OtherMarketingRevenueMember srt:NaturalGasLiquidsReservesMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:PowderRiverBasinMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasReservesMember chk:BrazosValleyMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasLiquidsReservesMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasReservesMember chk:MarcellusMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasReservesMember chk:HaynesvilleMember 2019-01-01 2019-03-31 0000895126 us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember srt:NaturalGasReservesMember 2019-01-01 2019-03-31 0000895126 chk:MidContinentMember 2019-01-01 2019-03-31 0000895126 us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember srt:OilReservesMember 2019-01-01 2019-03-31 0000895126 chk:BrazosValleyMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:EagleFordMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasLiquidsReservesMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:MarcellusMember 2019-01-01 2019-03-31 0000895126 chk:MarcellusMember 2019-01-01 2019-03-31 0000895126 us-gaap:OilAndGasMember srt:OilReservesMember 2019-01-01 2019-03-31 0000895126 chk:PowderRiverBasinMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember chk:HaynesvilleMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember chk:HaynesvilleMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasReservesMember 2020-01-01 2020-03-31 0000895126 chk:OtherMarketingRevenueMember 2019-01-01 2019-03-31 0000895126 srt:OilReservesMember chk:PowderRiverBasinMember 2019-01-01 2019-03-31 0000895126 us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember srt:OilReservesMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:BrazosValleyMember 2019-01-01 2019-03-31 0000895126 srt:OilReservesMember chk:BrazosValleyMember 2019-01-01 2019-03-31 0000895126 us-gaap:OilAndGasMember srt:NaturalGasLiquidsReservesMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasReservesMember chk:EagleFordMember 2019-01-01 2019-03-31 0000895126 us-gaap:OilAndGasMember srt:NaturalGasReservesMember 2020-01-01 2020-03-31 0000895126 chk:OtherMarketingRevenueMember srt:OilReservesMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:PowderRiverBasinMember 2019-01-01 2019-03-31 0000895126 srt:OilReservesMember 2020-01-01 2020-03-31 0000895126 us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember srt:NaturalGasLiquidsReservesMember 2020-01-01 2020-03-31 0000895126 chk:OtherMarketingRevenueMember srt:NaturalGasReservesMember 2019-01-01 2019-03-31 0000895126 srt:OilReservesMember chk:PowderRiverBasinMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember chk:EagleFordMember 2019-01-01 2019-03-31 0000895126 chk:OtherMarketingRevenueMember srt:NaturalGasLiquidsReservesMember 2019-01-01 2019-03-31 0000895126 chk:EagleFordMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasReservesMember chk:MidContinentMember 2020-01-01 2020-03-31 0000895126 us-gaap:OilAndGasMember srt:NaturalGasReservesMember 2019-01-01 2019-03-31 0000895126 chk:BrazosValleyMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasReservesMember chk:PowderRiverBasinMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:EagleFordMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember chk:MarcellusMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasReservesMember chk:MidContinentMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasReservesMember chk:EagleFordMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember chk:BrazosValleyMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember chk:MidContinentMember 2019-01-01 2019-03-31 0000895126 us-gaap:OilAndGasMember srt:OilReservesMember 2020-01-01 2020-03-31 0000895126 chk:PowderRiverBasinMember 2019-01-01 2019-03-31 0000895126 srt:OilReservesMember chk:MarcellusMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:HaynesvilleMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasLiquidsReservesMember chk:MidContinentMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasReservesMember chk:PowderRiverBasinMember 2019-01-01 2019-03-31 0000895126 srt:NaturalGasReservesMember chk:BrazosValleyMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember chk:MidContinentMember 2020-01-01 2020-03-31 0000895126 chk:OtherMarketingRevenueMember srt:OilReservesMember 2020-01-01 2020-03-31 0000895126 2019-10-01 2019-12-31 0000895126 chk:WildhorseResourceDevelopmentCorporationMember 2020-01-01 2020-03-31 0000895126 chk:WildhorseResourceDevelopmentCorporationMember 2019-03-31 0000895126 chk:WildhorseResourceDevelopmentCorporationMember 2019-01-01 2019-03-31 0000895126 chk:WildhorseResourceDevelopmentCorporationMember us-gaap:DomesticCountryMember 2019-03-31 0000895126 chk:WildhorseResourceDevelopmentCorporationMember 2020-03-31 0000895126 us-gaap:RestrictedStockMember 2020-01-01 2020-03-31 0000895126 us-gaap:RestrictedStockMember 2020-03-31 0000895126 us-gaap:RestrictedStockMember 2019-12-31 0000895126 chk:AwardYear2019Payable20202021and2022Member us-gaap:PerformanceSharesMember 2020-03-31 0000895126 chk:AwardYear2018Payable2020and2021Member us-gaap:PerformanceSharesMember 2020-03-31 0000895126 chk:AwardYear2017Payable2020Member us-gaap:PerformanceSharesMember 2020-03-31 0000895126 chk:AwardYear2018Payable2020and2021Member chk:CashRestrictedStockUnitsMember 2020-03-31 0000895126 chk:AwardYear2018Payable2020and2021Member chk:CashRestrictedStockUnitsMember 2019-12-31 0000895126 chk:AwardYear2018Payable2020and2021Member us-gaap:PerformanceSharesMember 2019-12-31 0000895126 chk:AwardYear2017Payable2020Member us-gaap:PerformanceSharesMember 2019-12-31 0000895126 chk:AwardYear2019Payable20202021and2022Member us-gaap:PerformanceSharesMember 2019-12-31 0000895126 2019-01-01 2019-12-31 0000895126 chk:RestrictedStockandStockOptionsMember us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-03-31 0000895126 chk:RestrictedStockandStockOptionsMember us-gaap:OperatingIncomeLossMember 2019-01-01 2019-03-31 0000895126 chk:RestrictedStockandStockOptionsMember us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-03-31 0000895126 chk:RestrictedStockandStockOptionsMember us-gaap:OperatingIncomeLossMember 2020-01-01 2020-03-31 0000895126 chk:RestrictedStockandStockOptionsMember us-gaap:OtherOperatingIncomeExpenseMember 2019-01-01 2019-03-31 0000895126 chk:RestrictedStockandStockOptionsMember us-gaap:OtherOperatingIncomeExpenseMember 2020-01-01 2020-03-31 0000895126 chk:RestrictedStockandStockOptionsMember 2019-01-01 2019-03-31 0000895126 chk:RestrictedStockandStockOptionsMember 2020-01-01 2020-03-31 0000895126 srt:MinimumMember srt:ManagementMember us-gaap:PerformanceSharesMember 2020-01-01 2020-03-31 0000895126 srt:ManagementMember us-gaap:PerformanceSharesMember 2020-01-01 2020-03-31 0000895126 srt:MaximumMember srt:ManagementMember us-gaap:PerformanceSharesMember 2020-01-01 2020-03-31 0000895126 us-gaap:EmployeeStockOptionMember 2020-03-31 0000895126 srt:MinimumMember srt:ManagementMember us-gaap:EmployeeStockOptionMember 2020-01-01 2020-03-31 0000895126 srt:MaximumMember srt:ManagementMember us-gaap:EmployeeStockOptionMember 2020-01-01 2020-03-31 0000895126 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-03-31 0000895126 srt:MaximumMember us-gaap:PerformanceSharesMember 2020-01-01 2020-03-31 0000895126 srt:MinimumMember us-gaap:PerformanceSharesMember 2020-01-01 2020-03-31 0000895126 us-gaap:PerformanceSharesMember us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-03-31 0000895126 us-gaap:PerformanceSharesMember us-gaap:OilAndGasPropertiesMember 2020-01-01 2020-03-31 0000895126 us-gaap:PerformanceSharesMember 2020-01-01 2020-03-31 0000895126 us-gaap:PerformanceSharesMember 2019-01-01 2019-03-31 0000895126 us-gaap:PerformanceSharesMember us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-03-31 0000895126 us-gaap:PerformanceSharesMember chk:ExplorationExpenseMember 2019-01-01 2019-03-31 0000895126 us-gaap:PerformanceSharesMember us-gaap:OilAndGasPropertiesMember 2019-01-01 2019-03-31 0000895126 us-gaap:PerformanceSharesMember chk:ExplorationExpenseMember 2020-01-01 2020-03-31 0000895126 us-gaap:PerformanceSharesMember chk:OilNaturalGasandNGLProductionMember 2020-01-01 2020-03-31 0000895126 us-gaap:PerformanceSharesMember chk:OilNaturalGasandNGLProductionMember 2019-01-01 2019-03-31 0000895126 srt:ManagementMember us-gaap:EmployeeStockOptionMember 2020-01-01 2020-03-31 0000895126 chk:CashRestrictedStockUnitsMember 2018-01-01 2018-12-31 0000895126 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:CommodityContractMember us-gaap:NondesignatedMember 2019-12-31 0000895126 us-gaap:OtherCurrentAssetsMember us-gaap:CommodityContractMember us-gaap:NondesignatedMember 2019-12-31 0000895126 us-gaap:CommodityContractMember us-gaap:NondesignatedMember 2020-03-31 0000895126 us-gaap:CommodityContractMember us-gaap:NondesignatedMember 2019-12-31 0000895126 us-gaap:OtherCurrentLiabilitiesMember us-gaap:CommodityContractMember us-gaap:NondesignatedMember 2019-12-31 0000895126 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:CommodityContractMember us-gaap:NondesignatedMember 2020-03-31 0000895126 us-gaap:OtherCurrentLiabilitiesMember us-gaap:CommodityContractMember us-gaap:NondesignatedMember 2020-03-31 0000895126 us-gaap:OtherCurrentAssetsMember us-gaap:CommodityContractMember us-gaap:NondesignatedMember 2020-03-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel3Member chk:OilNaturalGasandNGLSalesMember 2019-01-01 2019-03-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel3Member chk:OilNaturalGasandNGLSalesMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember 2019-01-01 2019-12-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:BasisSwapMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:CallOptionMember 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:PutOptionMember 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember chk:CollarMember 2019-12-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember chk:CollarMember 2020-03-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:BasisSwapMember 2019-01-01 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwaptionMember 2020-03-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:CallOptionMember 2020-01-01 2020-03-31 0000895126 us-gaap:EnergyRelatedDerivativeMember 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:CallOptionMember 2019-01-01 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:BasisSwapMember 2019-12-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:CallOptionMember 2019-01-01 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwaptionMember 2019-01-01 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwapMember 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:CallOptionMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:CallOptionMember 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwapMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwapMember 2019-01-01 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:CallOptionMember 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwapMember 2020-03-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:PutOptionMember 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember chk:CollarMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:PutOptionMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:BasisSwapMember 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:CallOptionMember 2020-03-31 0000895126 us-gaap:EnergyRelatedDerivativeMember 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwaptionMember 2019-12-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember 2020-03-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:BasisSwapMember 2020-03-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:PutOptionMember 2019-01-01 2019-12-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:BasisSwapMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwapMember 2019-01-01 2019-12-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:BasisSwapMember 2019-01-01 2019-12-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember chk:CollarMember 2019-01-01 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember 2019-01-01 2019-12-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwapMember 2020-01-01 2020-03-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwaptionMember 2020-01-01 2020-03-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:BasisSwapMember 2020-03-31 0000895126 srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwapMember 2019-12-31 0000895126 srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:SwapMember 2019-12-31 0000895126 us-gaap:CashFlowHedgingMember 2018-12-31 0000895126 us-gaap:CashFlowHedgingMember 2019-01-01 2019-03-31 0000895126 us-gaap:CashFlowHedgingMember 2019-03-31 0000895126 us-gaap:CashFlowHedgingMember 2020-01-01 2020-03-31 0000895126 us-gaap:CashFlowHedgingMember 2019-12-31 0000895126 us-gaap:CashFlowHedgingMember 2020-03-31 0000895126 us-gaap:CommodityContractMember us-gaap:NondesignatedMember chk:OilNaturalGasandNGLSalesMember 2020-01-01 2020-03-31 0000895126 chk:OilNaturalGasandNGLSalesMember 2020-01-01 2020-03-31 0000895126 us-gaap:CommodityContractMember us-gaap:NondesignatedMember chk:OilNaturalGasandNGLSalesMember 2019-01-01 2019-03-31 0000895126 chk:OilNaturalGasandNGLSalesMember 2019-01-01 2019-03-31 0000895126 chk:FutureNaturalGasPricesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:FairValueInputsLevel3Member chk:UticaShaleMember 2019-12-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel3Member 2019-03-31 0000895126 chk:FutureNaturalGasPricesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:FairValueInputsLevel3Member chk:UticaShaleMember 2020-01-01 2020-03-31 0000895126 chk:FutureNaturalGasPricesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:FairValueInputsLevel3Member chk:UticaShaleMember 2018-12-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel3Member 2020-01-01 2020-03-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0000895126 chk:FutureNaturalGasPricesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:FairValueInputsLevel3Member chk:UticaShaleMember 2019-03-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel3Member 2018-12-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel3Member 2020-03-31 0000895126 chk:FutureNaturalGasPricesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:FairValueInputsLevel3Member chk:UticaShaleMember 2019-01-01 2019-03-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel3Member 2019-01-01 2019-03-31 0000895126 chk:FutureNaturalGasPricesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:FairValueInputsLevel3Member chk:UticaShaleMember 2020-03-31 0000895126 us-gaap:CreditRiskMember 2020-03-31 0000895126 us-gaap:DesignatedAsHedgingInstrumentMember 2020-03-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel2Member 2020-03-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0000895126 us-gaap:CommodityContractMember 2020-03-31 0000895126 us-gaap:FairValueInputsLevel3Member 2019-12-31 0000895126 us-gaap:FairValueInputsLevel2Member 2019-12-31 0000895126 us-gaap:FairValueInputsLevel3Member 2020-03-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel1Member 2020-03-31 0000895126 us-gaap:CommodityContractMember 2019-12-31 0000895126 us-gaap:FairValueInputsLevel2Member 2020-03-31 0000895126 us-gaap:FairValueInputsLevel1Member 2019-12-31 0000895126 us-gaap:CommodityContractMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0000895126 us-gaap:FairValueInputsLevel1Member 2020-03-31 0000895126 us-gaap:OtherContractMember chk:MarketingGatheringAndCompressionMember 2019-01-01 2019-03-31 0000895126 us-gaap:OtherContractMember chk:MarketingGatheringAndCompressionMember 2020-01-01 2020-03-31 0000895126 chk:MarketingMember chk:MarketingGatheringAndCompressionMember 2019-01-01 2019-03-31 0000895126 chk:MarketingMember chk:MarketingGatheringAndCompressionMember 2020-01-01 2020-03-31 0000895126 srt:WeightedAverageMember srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:MeasurementInputPriceVolatilityMember 2020-03-31 0000895126 srt:WeightedAverageMember srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:MeasurementInputPriceVolatilityMember 2020-03-31 0000895126 srt:MaximumMember srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:MeasurementInputPriceVolatilityMember 2020-03-31 0000895126 us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0000895126 srt:MaximumMember srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:MeasurementInputPriceVolatilityMember 2020-03-31 0000895126 srt:MinimumMember srt:NaturalGasReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:MeasurementInputPriceVolatilityMember 2020-03-31 0000895126 srt:MinimumMember srt:OilReservesMember us-gaap:EnergyRelatedDerivativeMember us-gaap:MeasurementInputPriceVolatilityMember 2020-03-31 0000895126 chk:SandMineMember 2020-01-01 2020-03-31 0000895126 us-gaap:OilAndGasPropertiesMember 2020-01-01 2020-03-31 0000895126 us-gaap:OilAndGasPropertiesMember 2020-03-31 0000895126 chk:FtsInternationalIncMember 2020-03-31 0000895126 chk:FtsInternationalIncMember 2020-01-01 2020-03-31 0000895126 us-gaap:CommonStockMember us-gaap:SubsequentEventMember 2020-04-10 0000895126 us-gaap:SubsequentEventMember 2020-04-23 0000895126 us-gaap:SubsequentEventMember 2020-04-10 0000895126 us-gaap:PreferredClassBMember us-gaap:SubsequentEventMember 2020-04-23 0000895126 us-gaap:CommonStockMember us-gaap:SubsequentEventMember 2020-04-13 2020-04-13 0000895126 us-gaap:PreferredClassBMember us-gaap:PreferredStockMember us-gaap:SubsequentEventMember 2020-04-23 2020-04-23 xbrli:pure iso4217:USD xbrli:shares xbrli:shares iso4217:USD utreg:Bcf chk:counterparty utreg:MMBbls chk:derivative



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2020
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File No. 1-13726
CHESAPEAKE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Oklahoma
73-1395733
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
6100 North Western Avenue,
Oklahoma City,
Oklahoma
73118
(Address of principal executive offices)
(Zip Code)
 
 
(405)
 848-8000
 
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class
 
Trading Symbol(s)
 
Name of Each Exchange on Which Registered
Common Stock, par value $0.01
 
CHK
 
New York Stock Exchange
6.625% Senior Notes due 2020
 
CHK20A
 
New York Stock Exchange
6.875% Senior Notes due 2020
 
CHK20
 
New York Stock Exchange
6.125% Senior Notes due 2021
 
CHK21
 
New York Stock Exchange
5.375% Senior Notes due 2021
 
CHK21A
 
New York Stock Exchange
4.875% Senior Notes due 2022
 
CHK22
 
New York Stock Exchange
5.75% Senior Notes due 2023
 
CHK23
 
New York Stock Exchange
4.5% Cumulative Convertible Preferred Stock
 
CHK Pr D
 
New York Stock Exchange
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes       No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer   Accelerated Filer   Non-accelerated Filer  
Smaller Reporting Company   Emerging Growth Company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes       No  
As of May 7, 2020, there were 9,783,101 shares of our $0.01 par value common stock outstanding.




CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
INDEX TO FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2020


 
PART I. FINANCIAL INFORMATION
Page
Item 1.
 
 
Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019
 
for the Three Months Ended March 31, 2020 and 2019
 
for the Three Months Ended March 31, 2020 and 2019
 
for the Three Months Ended March 31, 2020 and 2019
 
for the Three Months Ended March 31, 2020 and 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
Item 4.
 
PART II. OTHER INFORMATION
 
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


Table of Contents
PART I. FINANCIAL INFORMATION



ITEM 1.
Condensed Consolidated Financial Statements

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
 
March 31,
2020
 
December 31,
2019
 
 
($ in millions)
CURRENT ASSETS:
 
 
 
 
Cash and cash equivalents ($2 and $2 attributable to our VIE)
 
$
82

 
$
6

Accounts receivable, net
 
762

 
990

Short-term derivative assets
 
884

 
134

Other current assets
 
90

 
121

Total Current Assets
 
1,818

 
1,251

PROPERTY AND EQUIPMENT:
 
 
 
 
Oil and natural gas properties, at cost based on successful efforts accounting:
 
 
 
 
Proved oil and natural gas properties
($755 and $755 attributable to our VIE)
 
31,251

 
30,765

Unproved properties
 
1,870

 
2,173

Other property and equipment
 
1,812

 
1,810

Total Property and Equipment, at Cost
 
34,933

 
34,748

Less: accumulated depreciation, depletion and amortization
(($748) and ($713) attributable to our VIE)
 
(29,110
)
 
(20,002
)
Property and equipment held for sale, net
 
10

 
10

Total Property and Equipment, Net
 
5,833

 
14,756

LONG-TERM ASSETS:
 
 
 
 
Other long-term assets
 
157

 
186

TOTAL ASSETS
 
$
7,808

 
$
16,193



The accompanying notes are an integral part of these condensed consolidated financial statements.
3

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS – (Continued)
(Unaudited)

 
 
March 31,
2020
 
December 31,
2019
 
 
($ in millions)
CURRENT LIABILITIES:
 
 
 
 
Accounts payable
 
$
552

 
$
498

Current maturities of long-term debt, net
 
420

 
385

Accrued interest
 
136

 
75

Short-term derivative liabilities
 

 
2

Other current liabilities ($1 and $1 attributable to our VIE)
 
1,152

 
1,432

Total Current Liabilities
 
2,260

 
2,392

LONG-TERM LIABILITIES:
 
 
 
 
Long-term debt, net
 
9,163

 
9,073

Long-term derivative liabilities
 
22

 
2

Asset retirement obligations, net of current portion
 
206

 
200

Other long-term liabilities
 
81

 
125

Total Long-Term Liabilities
 
9,472

 
9,400

CONTINGENCIES AND COMMITMENTS (Note 5)
 

 

EQUITY:
 
 
 
 
Chesapeake Stockholders’ Equity:
 
 
 
 
Preferred stock, $0.01 par value, 20,000,000 shares authorized 5,563,458 shares outstanding
 
1,631

 
1,631

Common stock, $0.01 par value, 22,500,000 and 15,000,000 shares authorized: 9,783,773 and 9,772,793 shares issued(a)
 

 

Additional paid-in capital(a)
 
16,920

 
16,973

Accumulated deficit
 
(22,517
)
 
(14,220
)
Accumulated other comprehensive income
 
21

 
12

Less: treasury stock, at cost; 0 and 26,224 common shares(a)
 

 
(32
)
Total Chesapeake Stockholders’ Equity (Deficit)
 
(3,945
)
 
4,364

Noncontrolling interests
 
21

 
37

Total Equity (Deficit)
 
(3,924
)
 
4,401

TOTAL LIABILITIES AND EQUITY
 
$
7,808

 
$
16,193


____________________________________________
(a)
Amounts and shares have been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.


The accompanying notes are an integral part of these condensed consolidated financial statements.
4

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)


 
 
 
Three Months Ended
March 31,
 
 
 
2020
 
2019
  
 
 
($ in millions except per share data)
REVENUES AND OTHER:
 
 
 
 
 
Oil, natural gas and NGL
 
 
$
1,801

 
$
929

Marketing
 
 
724

 
1,233

Total Revenues
 
 
2,525

 
2,162

Other
 
 
16

 
15

Gains on sales of assets
 
 

 
19

Total Revenues and Other
 
 
2,541

 
2,196

OPERATING EXPENSES:
 
 
 
 
 
Oil, natural gas and NGL production
 
 
122

 
115

Oil, natural gas and NGL gathering, processing and transportation
 
 
285

 
274

Severance and ad valorem taxes
 
 
54

 
51

Exploration
 
 
282

 
24

Marketing
 
 
746

 
1,230

General and administrative
 
 
65

 
103

Restructuring and other termination costs
 
 
5

 

Provision for legal contingencies, net
 
 
1

 

Depreciation, depletion and amortization
 
 
603

 
519

Impairments
 
 
8,522

 
1

Other operating expense
 
 
83

 
61

Total Operating Expenses
 
 
10,768

 
2,378

LOSS FROM OPERATIONS
 
 
(8,227
)
 
(182
)
OTHER INCOME (EXPENSE):
 
 

 
 
Interest expense
 
 
(145
)
 
(161
)
Losses on investments
 
 
(23
)
 
(1
)
Gains on purchases or exchanges of debt
 
 
63

 

Other income
 
 
6

 
9

Total Other Expense
 
 
(99
)
 
(153
)
LOSS BEFORE INCOME TAXES
 
 
(8,326
)
 
(335
)
Income tax benefit
 
 
(13
)
 
(314
)
NET LOSS
 
 
(8,313
)
 
(21
)
Net loss attributable to noncontrolling interests
 
 
16

 

NET LOSS ATTRIBUTABLE TO CHESAPEAKE
 
 
(8,297
)
 
(21
)
Preferred stock dividends
 
 
(22
)
 
(23
)
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS
 
 
$
(8,319
)
 
$
(44
)
LOSS PER COMMON SHARE:(a)
 
 
 
 
 
Basic
 
 
$
(852.97
)
 
$
(6.37
)
Diluted
 
 
$
(852.97
)
 
$
(6.37
)
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in thousands):(a)
 
 
 
 
 
Basic
 
 
9,753

 
6,902

Diluted
 
 
9,753

 
6,902


____________________________________________
(a)
All share and per share information has been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.

The accompanying notes are an integral part of these condensed consolidated financial statements.
5

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)



 
 
Three Months Ended
March 31,
 
 
2020
 
2019
 
 
($ in millions)
NET LOSS
 
$
(8,313
)
 
$
(21
)
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX:
 
 
 
 
Reclassification of losses on settled derivative instruments(a)
 
9

 
10

Other Comprehensive Income
 
9

 
10

COMPREHENSIVE LOSS
 
(8,304
)
 
(11
)
COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
 
16

 

COMPREHENSIVE LOSS ATTRIBUTABLE TO CHESAPEAKE
 
$
(8,288
)
 
$
(11
)

___________________________________________
(a)
Deferred tax activity incurred in other comprehensive income was offset by a valuation allowance.

The accompanying notes are an integral part of these condensed consolidated financial statements.
6

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 
 
Three Months Ended
March 31,
 
 
2020
 
2019
 
 
($ in millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
NET LOSS
 
$
(8,313
)
 
$
(21
)
ADJUSTMENTS TO RECONCILE NET LOSS TO CASH PROVIDED BY OPERATING ACTIVITIES:
 
 
 
 
Depreciation, depletion and amortization
 
603

 
519

Deferred income tax benefit
 
(10
)
 
(314
)
Derivative (gains) losses, net
 
(907
)
 
304

Cash receipts on derivative settlements, net
 
89

 
14

Stock-based compensation
 
5

 
6

Gains on sales of assets
 

 
(19
)
Impairments
 
8,522

 
1

Exploration
 
279

 
18

Losses on investments
 
23

 
1

Gains on purchases or exchanges of debt
 
(63
)
 

Other
 
8

 
40

Changes in assets and liabilities
 
161

 
(93
)
Net Cash Provided By Operating Activities
 
397

 
456

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
Drilling and completion costs
 
(501
)
 
(515
)
Business combination, net
 

 
(353
)
Acquisitions of proved and unproved properties
 
(6
)
 
(6
)
Proceeds from divestitures of proved and unproved properties
 
7

 
26

Additions to other property and equipment
 
(11
)
 
(9
)
Proceeds from sales of other property and equipment
 

 
1

Net Cash Used In Investing Activities
 
(511
)
 
(856
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
Proceeds from revolving credit facility borrowings
 
2,331

 
3,572

Payments on revolving credit facility borrowings
 
(2,021
)
 
(3,136
)
Cash paid to purchase debt
 
(93
)
 
(1
)
Cash paid for preferred stock dividends
 
(22
)
 
(23
)
Other
 
(5
)
 
(8
)
Net Cash Provided By Financing Activities
 
190

 
404

Net increase in cash and cash equivalents
 
76

 
4

Cash and cash equivalents, beginning of period
 
6

 
4

Cash and cash equivalents, end of period
 
$
82

 
$
8

 
 
 
 
 
 


The accompanying notes are an integral part of these condensed consolidated financial statements.
7

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued)
(Unaudited)

Supplemental disclosures to the condensed consolidated statements of cash flows are presented below:
 
 
Three Months Ended
March 31,
 
 
2020
 
2019
 
 
($ in millions)
SUPPLEMENTAL CASH FLOW INFORMATION:
 
 
 
 
Interest paid, net of capitalized interest
 
$
113

 
$
145

Income taxes paid, net of refunds received
 
$

 
$
(5
)
 
 
 
 
 
SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES:
 
 
 
 
Common stock issued for business combination
 
$

 
$
2,037

Change in accrued drilling and completion costs
 
$
(29
)
 
$
39




The accompanying notes are an integral part of these condensed consolidated financial statements.
8

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)




 
 
Three Months Ended
March 31,
 
 
2020
 
2019
 
 
($ in millions)
PREFERRED STOCK:
 
 
 
 
Balance, beginning and end of period
 
$
1,631

 
$
1,671

COMMON STOCK:(a)
 
 
 
 
Balance, beginning of period
 

 

Common shares issued for WildHorse Merger
 

 

Balance, end of period
 

 

ADDITIONAL PAID-IN CAPITAL:(a)
 
 
 
 
Balance, beginning of period
 
16,973

 
14,387

Common shares issued for WildHorse Merger
 

 
2,037

Stock-based compensation
 
(31
)
 
7

Dividends on preferred stock
 
(22
)
 
(23
)
Balance, end of period
 
16,920

 
16,408

ACCUMULATED DEFICIT:
 
 
 
 
Balance, beginning of period
 
(14,220
)
 
(13,912
)
Net loss attributable to Chesapeake
 
(8,297
)
 
(21
)
Balance, end of period
 
(22,517
)
 
(13,933
)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
 
 
 
 
Balance, beginning of period
 
12

 
(23
)
Hedging activity
 
9

 
10

Balance, end of period
 
21

 
(13
)
TREASURY STOCK – COMMON:(a)
 
 
 
 
Balance, beginning of period
 
(32
)
 
(31
)
Purchase of 17,901 and 12,697 shares for company benefit plans
 
(2
)
 
(6
)
Release of 44,126 and 553 shares from company benefit plans
 
34

 
1

Balance, end of period
 

 
(36
)
TOTAL CHESAPEAKE STOCKHOLDERS’ EQUITY (DEFICIT)
 
(3,945
)
 
4,097

NONCONTROLLING INTERESTS:
 
 
 
 
Balance, beginning of period
 
37

 
41

Net loss attributable to noncontrolling interests
 
(16
)
 

Balance, end of period
 
21

 
41

TOTAL EQUITY (DEFICIT)
 
$
(3,924
)
 
$
4,138


____________________________________________
(a)
Amounts and shares have been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.


The accompanying notes are an integral part of these condensed consolidated financial statements.
9

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


1.
Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements of Chesapeake were prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the SEC. Pursuant to such rules and regulations, certain disclosures have been condensed or omitted.
This Form 10-Q relates to the three months ended March 31, 2020 (the “Current Quarter”) and the three months ended March 31, 2019 (the “Prior Quarter”). Our annual report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”) should be read in conjunction with this Form 10-Q. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of our condensed consolidated financial statements and accompanying notes and include the accounts of our direct and indirect wholly owned subsidiaries and entities in which we have a controlling financial interest. Intercompany accounts and balances have been eliminated.
Risks and Uncertainties
On March 11, 2020, the World Health Organization declared the ongoing coronavirus (COVID-19) outbreak a pandemic and recommended containment and mitigation measures worldwide. The pandemic has reached more than 200 countries and territories and has resulted in widespread adverse impacts on the global economy and on our customers and other parties with whom we have business relations. To date, we have experienced limited operational impacts as a result of the restrictions from working remotely or COVID-19 directly. As an essential business under the guidelines issued by each of the states in which we operate, we have been allowed to continue operations, although for the health and safety of our employees we chose to have our non-essential personnel work remotely. As a result, since mid-March, we have restricted access to all of our offices and have directed employees to work remotely to the extent possible. Those employees who are unable to work remotely are being closely monitored and are taking safety precautions to minimize the risk of exposure. These restrictions have allowed us to maintain the engagement and connectivity of our personnel, as well as minimize the number of employees required in the office and field. However, due to severe impacts from the global COVID-19 pandemic on the global demand for oil and natural gas, operating results for the three months ended March 31, 2020 are not necessarily indicative of financial results for the entire year as only one month of the Current Quarter was impacted by COVID-19 and the related economic volatility. Moreover, future operations could be negatively affected if a significant number of our employees are quarantined as a result of exposure to the virus.
There is considerable uncertainty regarding the extent to which COVID-19 will continue to spread and the extent and duration of governmental and other measures implemented to try to slow the spread of the virus, such as large-scale travel bans and restrictions, border closures, quarantines, shelter-in-place orders and business and government shutdowns. One of the largest impacts of the pandemic has been a significant reduction in global demand for oil and, to a lesser extent, natural gas. This significant decline in demand has been met with a sharp decline in oil prices following the announcement of price reductions and production increases in March 2020 by members of the Organization of Petroleum Exporting Countries (OPEC+) and other foreign, oil-exporting countries. The resulting supply/demand imbalance is having disruptive impacts on the oil and natural gas exploration and production industry and on other industries that serve exploration and production companies. These industry conditions, coupled with those resulting from the COVID-19 pandemic, are expected to lead to significant global economic contraction generally and in our industry in particular.
Oil and natural gas prices have historically been volatile; however, the volatility in the prices for these commodities has substantially increased as a result of COVID-19 and the OPEC+ decisions mentioned above. While an agreement to cut production has since been announced by OPEC+ and its allies, the situation, coupled with the impact of COVID-19, has continued to result in a significant downturn in the oil and gas industry. Oil prices declined sharply in April 2020 and remain volatile. Strip pricing for natural gas has increased as a result of the oil price war; however, the impact of these recent developments and our business are unpredictable. We expect to see continued volatility in oil and natural gas prices for the foreseeable future, and such volatility, combined with the current depressed prices, has impacted and is expected to continue to adversely impact our business. A continued low level of demand or prices for oil and natural gas or otherwise would have a continued material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

10

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

We cannot predict the full impact that COVID-19 or the significant disruption and volatility currently being experienced in the oil and natural gas markets will have on our business, cash flows, liquidity, financial condition and results of operations at this time due to numerous uncertainties. The ultimate impacts will depend on future developments, including the ultimate geographic spread of the virus, the consequences of governmental and other measures designed to prevent the spread of the virus, the development of effective treatments, the duration of the outbreak, actions taken by members of OPEC+ and other foreign, oil-exporting countries, governmental authorities, customers and other third parties, workforce availability, and the timing and extent to which normal economic and operating conditions resume.
Reverse Stock Split
On April 13, 2020, our Board of Directors and our shareholders approved a 1-for-200 (1:200) reverse stock split of our common stock and a reduction in the total number of authorized shares of our common stock as determined by a formula based on two-thirds of the reverse stock split ratio. The reverse stock split became effective as of the close of business on April 14, 2020. Our common stock began trading on a split-adjusted basis on the New York Stock Exchange (NYSE) at the market open on April 15, 2020. The par value of the common stock was not adjusted as a result of the reverse stock split. All share and per share data have been retroactively adjusted to reflect this reverse stock split, including reclassifying an amount equal to the reduction in par value of our common stock to additional paid-in capital. See Note 17 for additional information.
2.
Going Concern
Fluctuations in oil and natural gas prices have a material impact on our financial position, results of operations, cash flows and quantities of oil, natural gas and NGL reserves that may be economically produced. Historically, oil and natural gas prices have been volatile; however, the volatility in the prices for these commodities has substantially increased as a result of COVID-19 and the OPEC+ decisions discussed in Note 1. We expect to see continued volatility in oil and natural gas prices for the foreseeable future, and such volatility, combined with the current depressed prices has impacted and is expected to continue to adversely impact our business. If the current depressed prices persist, combined with the scheduled reductions in the leverage ratio covenant and an expected significant reduction in our borrowing base in our scheduled determination, then our liquidity and our ability to comply with our financial covenants during the next 12 months will be adversely affected. Based on our current forecast, we do not expect to be in compliance with our financial covenants beginning in the fourth quarter of 2020. Failure to comply with these covenants, if not waived, would result in an event of default under our revolving credit facility, the potential acceleration of outstanding debt thereunder and the potential foreclosure on the collateral securing such debt, and could cause a cross-default under our other outstanding indebtedness.
As a result of the impacts to the Company’s financial position resulting from declining industry conditions and in consideration of the substantial amount of long-term debt outstanding, the Company has engaged advisors to assist with the evaluation of strategic alternatives, which may include, but not be limited to, seeking a restructuring, amendment or refinancing of existing debt through a private restructuring or reorganization under Chapter 11 of the Bankruptcy Code. However, there can be no assurances that the Company will be able to successfully restructure its indebtedness, improve its financial position or complete any strategic transactions. As a result of these uncertainties and the likelihood of a restructuring or reorganization, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements (i) have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and other commitments in the normal course of business and (ii) do not include any adjustments to reflect the possible future effects of the uncertainty on the recoverability or classification of recorded asset amounts or the amounts or classifications of liabilities.

11

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

3.    Earnings Per Share
Basic earnings per share (EPS) is calculated using the weighted average number of common shares outstanding during the period and includes the effect of any participating securities as appropriate. Participating securities consist of unvested restricted stock issued to our employees and non-employee directors that provide dividend rights.
Diluted EPS is calculated assuming the issuance of common shares for all potentially dilutive securities, provided the effect is not antidilutive. For all periods presented, our convertible senior notes did not have a dilutive effect and, therefore, were excluded from the calculation of diluted EPS.
Shares of common stock for the following securities were excluded from the calculation of diluted EPS as the effect was antidilutive:
 
 
Three Months Ended
March 31,
 
 
2020
 
2019
 
 
(in thousands)
Common stock equivalent of our preferred stock outstanding(a)
 
290

 
298

Common stock equivalent of our convertible senior notes outstanding(a)
 
621

 
729

Participating securities(a)
 
4

 
2


____________________________________________
(a)
Amount has been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020. See Note 17 for additional information.
As a result of the Company’s reverse stock split effective on April 14, 2020, proportionate adjustments were made to the conversion price of Chesapeake’s outstanding 5.5% Convertible Senior Notes due 2026, 4.5% Cumulative Convertible Preferred Stock, 5.00% Cumulative Convertible Preferred Stock (Series 2005B), 5.75% Cumulative Convertible Non-Voting Preferred Stock (Series A) and 5.75% Cumulative Non-Voting Convertible Preferred Stock and to the outstanding awards and number of shares issued and issuable under the Company's equity compensation plans. See Note 17 for additional information.

12

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

4.
Debt
Our long-term debt consisted of the following as of March 31, 2020 and December 31, 2019:
 
March 31, 2020
 
December 31, 2019
 
Principal
Amount
 
Carrying
Amount
 
Principal
Amount
 
Carrying
Amount
 
($ in millions)
Revolving credit facility
$
1,900

 
$
1,900

 
$
1,590

 
$
1,590

Term loan due 2024
1,500

 
1,472

 
1,500

 
1,470

11.5% senior secured second lien notes due 2025
2,330

 
3,205

 
2,330

 
3,248

6.625% senior notes due 2020
177

 
177

 
208

 
208

6.875% senior notes due 2020
76

 
76

 
93

 
93

6.125% senior notes due 2021
167

 
167

 
167

 
167

5.375% senior notes due 2021
127

 
127

 
127

 
127

4.875% senior notes due 2022
272

 
272

 
338

 
338

5.75% senior notes due 2023
167

 
167

 
209

 
209

7.00% senior notes due 2024
624

 
624

 
624

 
624

6.875% senior notes due 2025
2

 
2

 
2

 
2

8.00% senior notes due 2025
246

 
245

 
246

 
245

5.5% convertible senior notes due 2026(a)(b)
1,064

 
773

 
1,064

 
765

7.5% senior notes due 2026
119

 
119

 
119

 
119

8.00% senior notes due 2026
46

 
44

 
46

 
44

8.00% senior notes due 2027
253

 
253

 
253

 
253

Debt issuance costs

 
(40
)
 

 
(44
)
Total debt, net
9,070

 
9,583

 
8,916

 
9,458

Less current maturities of long-term debt, net(c)
(420
)
 
(420
)
 
(385
)
 
(385
)
Total long-term debt, net
$
8,650

 
$
9,163

 
$
8,531

 
$
9,073

___________________________________________
(a)
We are required to account for the liability and equity components of our convertible debt instrument separately and to reflect interest expense through the first demand repurchase date, as applicable, at the interest rate of similar nonconvertible debt at the time of issuance. The applicable rate for our 5.5% Convertible Senior Notes due 2026 is 11.5%.
(b)
Prior to maturity under certain circumstances and at the holder’s option, the notes are convertible. During the Current Quarter, the price of our common stock was below the threshold level for conversion and, as a result, the holders do not have the option to convert their notes in the second quarter of 2020.
(c)
As of March 31, 2020, net current maturities of long-term debt includes our 6.625% Senior Notes due August 2020, our 6.875% Senior Notes due November 2020 and our 6.125% Senior Notes due February 2021. As of December 31, 2019, net current maturities of long-term debt includes our 6.625% Senior Notes due August 2020 and our 6.875% Senior Notes due November 2020.

13

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

Senior Notes
In the Current Quarter, we repurchased approximately $156 million aggregate principal amount of the following senior notes for $93 million and recorded an aggregate gain of approximately $63 million.
 
 
Notes Repurchased
 
 
($ in millions)
6.625% senior notes due 2020
 
$
31

6.875% senior notes due 2020
 
17

4.875% senior notes due 2022
 
66

5.75% senior notes due 2023
 
42

Total
 
$
156


Revolving Credit Facility
Our revolving credit facility matures in September 2023 and the current aggregate commitment of the lenders and borrowing base under the facility is $3.0 billion. The revolving credit facility provides for an accordion feature, pursuant to which the aggregate commitments thereunder may be increased to up to $4.0 billion from time to time, subject to agreement of the participating lenders and certain other customary conditions. Scheduled borrowing base redeterminations will continue to occur semiannually. Our borrowing base was reaffirmed on November 1, 2019. As of March 31, 2020, we had outstanding borrowings of $1.900 billion under our revolving credit facility and had used $89 million for various letters of credit. Our next borrowing base redetermination, scheduled for the second quarter of 2020, is not complete. Although we believe we have adequate reserves value to support the reaffirmation of our full borrowing base, we believe it is likely the lending group will reduce our borrowing base due to our distressed financial position.
Borrowings under our revolving credit facility bear interest at an alternative base rate (ABR) or LIBOR, at our election, plus an applicable margin ranging from 1.50%-2.50% per annum for ABR loans and 2.50%-3.50% per annum for LIBOR loans, depending on the percentage of the borrowing base then being utilized.
Our revolving credit facility is subject to various financial and other covenants. The terms of the credit agreement include covenants limiting, among other things, our ability to incur additional indebtedness, make investments or loans, incur liens, consummate mergers and similar fundamental changes, make restricted payments, make investments in unrestricted subsidiaries and enter into transactions with affiliates.
On December 3, 2019, we entered into the second amendment to our credit agreement. Among other things, the amendment (i) permitted the issuance of certain secured indebtedness with a lien priority or proceeds recovery behind the obligations under the credit agreement without a corresponding 25% reduction in the borrowing base under the credit agreement, if issued by the next scheduled redetermination of the borrowing base, (ii) increased the amount of indebtedness that can be secured on a pari passu first-lien basis with (and with recovery proceeds behind) the obligations under the credit agreement from $1 billion to $1.5 billion, (iii) increased the applicable margin as defined in the credit agreement on borrowings under the credit agreement by 100 basis points, (iv) requires liquidity of at least $250 million at all times, (v) for each fiscal quarter commencing with the fiscal quarter ending December 31, 2019, replaced the secured leverage ratio financial covenant with a requirement that the first lien secured leverage ratio not exceed 2.50 to 1 as of the end of such fiscal quarter, (vi) increased the maximum permitted total leverage ratio as of the end of each fiscal quarter to 4.50 to1 through the fiscal quarter ending December 31, 2021, with step-downs to 4.25 to 1 for the fiscal quarter ending March 31, 2022 and to 4.00 to 1 for each fiscal quarter ending thereafter, and (vii) required that we use the aggregate net cash proceeds of certain asset sales in excess of $50 million to prepay certain indebtedness and/or reduce commitments under our credit agreement, until the retirement of all of our senior notes maturing before September 12, 2023. On December 26, 2019, we entered into the third amendment to our credit agreement, which, among other things, permitted the issuance of certain secured indebtedness with a lien priority behind the obligations under the credit agreement without a corresponding 25% reduction in the borrowing base under the credit agreement, if issued by December 31, 2019 and issued in exchange for, or the proceeds used to refinance, our senior notes.

14

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

As of March 31, 2020, we were in compliance with all applicable financial covenants under the credit agreement and we were able to borrow up to the full availability under our revolving credit facility. If the current depressed prices persist, combined with the scheduled reductions in the leverage ratio covenant and an expected significant reduction in our borrowing base in our scheduled determination, then our liquidity and our ability to comply with our financial covenants during the next 12 months will be adversely affected. Based on our current forecast, we do not expect to be in compliance with our financial covenants beginning in the fourth quarter of 2020. Failure to comply with these covenants, if not waived, would result in an event of default under our revolving credit facility, the potential acceleration of outstanding debt thereunder and the potential foreclosure on the collateral securing such debt, and could cause a cross-default under our other outstanding indebtedness.
Phase-Out of LIBOR
In July 2017, the UK's Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR as a benchmark by the end of 2021. At the present time, our revolving credit facility and our term loan have terms that extend beyond 2021. Our revolving credit facility and our term loan each provide for a mechanism to amend the underlying agreements to reflect the establishment of an alternate rate of interest upon the occurrence of certain events related to the phase-out of LIBOR. However, we have not yet pursued any technical amendment or other contractual alternative to our revolving credit facility or term loan to address this matter. We are currently evaluating the potential impact of the eventual replacement of the LIBOR interest rate.
Fair Value of Debt
We estimate the fair value of our Level 1 debt based on the market value of our publicly traded debt as determined based on the yield of our senior notes. The fair value of our Level 2 debt is based on a market approach using estimates provided by an independent investment financial data services firm. Fair value is compared to the carrying value in the table below:
 
 
March 31, 2020
 
December 31, 2019
 
 
Carrying
Amount
 
Estimated
Fair Value
 
Carrying
Amount
 
Estimated
Fair Value
 
 
 
 
($ in millions)
 
 
Short-term debt (Level 1)
 
$
420

 
$
103

 
$
385

 
$
360

Long-term debt (Level 1)
 
$
565

 
$
68

 
$
753

 
$
622

Long-term debt (Level 2)
 
$
8,598

 
$
3,042

 
$
8,320

 
$
6,085


5.
Contingencies and Commitments
There have been no material developments in previously reported legal or environmental contingencies or commitments other than the items discussed below.
Contingencies
Litigation and Regulatory Proceedings
We are involved in a number of litigation and regulatory proceedings including those described below. Many of these proceedings are in early stages, and many of them seek or may seek damages and penalties, the amount of which is indeterminate. Our total accrued liability in respect of litigation and regulatory proceedings is determined on a case-by-case basis and represents an estimate of probable losses after considering, among other factors, the progress of each case or proceeding, our experience and the experience of others in similar cases or proceedings, and the opinions and views of legal counsel. Significant judgment is required in making these estimates and our final liabilities may ultimately be materially different.
Business Operations. We are involved in various lawsuits and disputes incidental to our business operations, including commercial disputes, personal injury claims, royalty claims, property damage claims and contract actions.
We and other natural gas producers have been named in various lawsuits alleging underpayment of royalties and other shares of the proceeds of production. The lawsuits against us allege, among other things, that we used below-market prices, made improper deductions, utilized improper measurement techniques, entered into arrangements with affiliates that resulted in underpayment of amounts owed in connection with the production and sale of natural gas and NGL, or similar theories. These lawsuits include cases filed by individual royalty owners and putative class actions, some of which seek to certify a statewide class. The lawsuits seek compensatory, consequential, treble, and punitive damages, restitution and disgorgement of profits, declaratory and injunctive relief regarding our payment practices, pre-and post-judgment interest, and attorney’s fees and costs. Royalty plaintiffs have varying provisions in their respective leases, oil and gas law varies from state to state, and royalty owners and producers differ in their interpretation of the legal effect of lease provisions governing royalty calculations. We have resolved a number of these claims through negotiated settlements of past and future royalty obligations and have prevailed in various other lawsuits. We are currently defending numerous lawsuits seeking damages with respect to underpayment of royalties or other shares of the proceeds of production in multiple states where we have operated, including those discussed below.
On December 9, 2015, the Commonwealth of Pennsylvania, by the Office of Attorney General, filed a lawsuit in the Bradford County Court of Common Pleas related to royalty underpayment and lease acquisition and accounting practices with respect to properties in Pennsylvania. The lawsuit, which primarily relates to the Marcellus Shale and Utica Shale, alleges that we violated the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) by making improper deductions and entering into arrangements with affiliates that resulted in underpayment of royalties. The lawsuit includes other UTPCPL claims and antitrust claims, including that a joint exploration agreement to which we are a party established unlawful market allocation for the acquisition of leases. The lawsuit seeks statutory restitution, civil penalties and costs, as well as a temporary injunction from exploration and drilling activities in Pennsylvania until restitution, penalties and costs have been paid, and a permanent injunction from further violations of the UTPCPL. We intend to vigorously defend these claims.
Putative statewide class actions in Pennsylvania and Ohio and purported class arbitrations in Pennsylvania have been filed on behalf of royalty owners asserting various claims for damages related to alleged underpayment of royalties as a result of the divestiture of substantially all of our midstream business and most of our gathering assets in 2012 and 2013. These cases include claims for violation of and conspiracy to violate the federal Racketeer Influenced and Corrupt Organizations Act and for an unlawful market allocation agreement for mineral rights, intentional interference with contractual relations, and violations of antitrust laws related to purported markets for gas mineral rights, operating rights and gas gathering sources. These lawsuits seek in aggregate compensatory, consequential, treble, and punitive damages, restitution and disgorgement of profits, declaratory and injunctive relief regarding our royalty payment practices, pre-and post-judgment interest, and attorney’s fees and costs. On December 20, 2017 and August 9, 2018, we reached tentative settlements to resolve substantially all Pennsylvania civil royalty cases for a total of approximately $36 million.
We believe losses are reasonably possible in certain of the pending royalty cases for which we have not accrued a loss contingency, but we are currently unable to estimate an amount or range of loss or the impact the actions could have on our future results of operations or cash flows. Uncertainties in pending royalty cases generally include the complex nature of the claims and defenses, the potential size of the class in class actions, the scope and types of the properties and agreements involved, and the applicable production years.
On July 24, 2018, Healthcare of Ontario Pension Plan (HOOPP) filed a demand for arbitration with the American Arbitration Association regarding HOOPP’s purchase of our interest in Chaparral Energy, Inc. stock for $215 million on January 5, 2014. HOOPP claims that we engaged in material misrepresentations and fraud, and that we violated the Securities Exchange Act of 1934 (the “Exchange Act”) and Oklahoma Uniform Securities Act. HOOPP seeks either rescission or $215 million in monetary damages, and in either case, interest, attorney’s fees, disgorgement and punitive damages. We intend to vigorously defend these claims.
In February 2019, a putative class action lawsuit was filed in the District Court of Dallas County, Texas against FTS International, Inc. (FTSI), certain investment banks, FTSI’s directors including certain of our officers and certain shareholders of FTSI including us. The lawsuit alleges various violations of Sections 11 (with respect to certain of our officers in their capacities as directors of FTSI) and 15 (with respect to such officers and us) of the Securities Act of 1933 in connection with public disclosure made during the initial public offering of FTSI. The suit seeks damages in excess of $1,000,000 and attorneys’ fees and other expenses. We intend to vigorously defend these claims.
Environmental Contingencies
The nature of the oil and gas business carries with it certain environmental risks for us and our subsidiaries. We have implemented various policies, programs, procedures, training and audits to reduce and mitigate such environmental risks. We conduct periodic reviews, on a company-wide basis, to assess changes in our environmental risk profile. Environmental reserves are established for environmental liabilities for which economic losses are probable and reasonably estimable. We manage our exposure to environmental liabilities in acquisitions by using an evaluation process that seeks to identify pre-existing contamination or compliance concerns and address the potential liability. Depending on the extent of an identified environmental concern, we may, among other things, exclude a property from the transaction, require the seller to remediate the property to our satisfaction in an acquisition or agree to assume liability for the remediation of the property.
We are named as a defendant in numerous lawsuits in Oklahoma alleging that we and other companies have engaged in activities that have caused earthquakes. These lawsuits seek compensation for injury to real and personal property, diminution of property value, economic losses due to business interruption, interference with the use and enjoyment of property, annoyance and inconvenience, personal injury and emotional distress.  In addition, they seek the reimbursement of insurance premiums and the award of punitive damages, attorneys’ fees, costs, expenses and interest. We intend to vigorously defend these claims.
Other Matters
Based on management’s current assessment, we are of the opinion that no pending or threatened lawsuit or dispute relating to our business operations is likely to have a material adverse effect on our future consolidated financial position, results of operations or cash flows. The final resolution of such matters could exceed amounts accrued, however, and actual results could differ materially from management’s estimates.
Commitments
Gathering, Processing and Transportation Agreements
We have contractual commitments with midstream service companies and pipeline carriers for future gathering, processing and transportation of oil, natural gas and NGL to move certain of our production to market. Working interest owners and royalty interest owners, where appropriate, will be responsible for their proportionate share of these costs. Commitments related to gathering, processing and transportation agreements are not recorded as obligations in the accompanying condensed consolidated balance sheets; however, they are reflected in our estimates of proved reserves.
The aggregate undiscounted commitments under our gathering, processing and transportation agreements, excluding any reimbursement from working interest and royalty interest owners, credits for third-party volumes or future costs under cost-of-service agreements, are presented below:
 
 
March 31,
2020
 
 
($ in millions)
Remainder of 2020
 
$
815

2021
 
986

2022
 
880

2023
 
752

2024
 
681

2025 – 2034
 
3,479

Total
 
$
7,593


In addition, we have entered into long-term agreements for certain natural gas gathering and related services within specified acreage dedication areas in exchange for cost-of-service based fees redetermined annually, or tiered fees based on volumes delivered relative to scheduled volumes. Future gathering fees may vary with the applicable agreement.

15

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

6.
Other Liabilities
Other current liabilities as of March 31, 2020 and December 31, 2019 are detailed below:
 
 
March 31,
2020
 
December 31,
2019
 
 
($ in millions)
Revenues and royalties due others
 
$
396

 
$
516

Accrued drilling and production costs
 
260

 
326

Joint interest prepayments received
 
57

 
52

VPP deferred revenue(a)
 
50

 
55

Accrued compensation and benefits(b)
 
56

 
156

Other accrued taxes
 
132

 
150

Other
 
201

 
177

Total other current liabilities
 
$
1,152

 
$
1,432


Other long-term liabilities as of March 31, 2020 and December 31, 2019 are detailed below:
 
 
March 31,
2020
 
December 31,
2019
 
 
($ in millions)
VPP deferred revenue(a)
 
$

 
$
9

Other
 
81

 
116

Total other long-term liabilities
 
$
81

 
$
125

____________________________________________
(a)
At the inception of our volumetric production payment (VPP) agreements, we (i) removed the proved reserves associated with the VPP, (ii) recognized VPP proceeds as deferred revenue which are being amortized on a unit-of-production basis to other revenue over the term of the VPP, (iii) retained responsibility for the production costs and capital costs related to VPP interests and (iv) ceased recognizing production associated with the VPP volumes. The remaining deferred revenue balance will be recognized in other revenues in the consolidated statement of operations through 2021, assuming the related VPP production volumes are delivered as scheduled.
(b)
In the Current Quarter, we terminated our nonqualified deferred compensation plan. Accordingly, we derecognized the asset associated with the plan after the participants’ investments were liquidated. The cash was distributed to the participants and we extinguished the corresponding $43 million accrued liability.

16

TABLE OF CONTENTS
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

7.
Revenue
The following table shows revenue disaggregated by operating area and product type, for the Current Quarter and the Prior Quarter:
 
 
Three Months Ended March 31, 2020
 
 
Oil
 
Natural Gas
 
NGL
 
Total
 
 
($ in millions)
Marcellus
 
$

 
$
175

 
$

 
$
175

Haynesville
 

 
85

 

 
85

Eagle Ford
 
277

 
31

 
20

 
328

Brazos Valley
 
172

 
4

 
4

 
180

Powder River Basin
 
68

 
15

 
7

 
90

Mid-Continent
 
22

 
10

 
4

 
36